Emissions management is about making the invisible, visible – by advancing new technologies to detect and eliminate leaks. Our emissions reduction commitments are integral to regular business planning and operations, and interim goals and progress toward our net-zero ambition are yielding near-term, tangible benefits.
In 2021, the newly formed Low Carbon Technologies organization began working with colleagues in global business units (BUs) to formalize region-specific, emissions reduction strategies and scenarios. By 2022, plans had been created for each BU and consolidated into the company’s net-zero roadmap to operationalize our net-zero ambition. Our net-zero program details near- and medium-term Scope 1 and 2 emissions reduction efforts by identifying and prioritizing viable abatement options. It also conceptualizes how we intend to fulfill our longer-term targets through planning, fostering technological advancements and partnering with peers and external stakeholders to explore pilot projects that could abate challenging operational emissions.
“By establishing a multi-disciplinary team focused on how to best reduce emissions, we’ve been able to high-grade opportunities for investment,” said Mark Hutcherson, Low Carbon Projects and Technology Director. “Leveraging the expertise and enthusiasm of this diverse team, employees are empowered to make emissions reductions a key driver in decision making.”
Local planning supports global goals
BU plans detail strategies and scenarios with time-bound actions, identify potential technology solutions for hard-to-abate emissions and describe the studies and pilots which aim to accelerate emissions reduction for specific assets. These plans help corporate technology staff, operations and engineering teams prioritize and forecast resource needs and project funding.
An essential element of all BU plans is the marginal abatement cost curve (MACC) process, a means by which we prioritize our most impactful near-term emissions reduction projects. The MACC plots the breakeven cost of CO2e reduction considering capital cost, operating costs and the potential increased revenue for each project against the cumulative greenhouse gas (GHG) emissions that can be reduced. All these processes and actions are underpinned by our company’s Triple Mandate: meeting energy transition pathway demand, delivering competitive returns on and of capital and achieving our net-zero emissions ambition for operational emissions.
By prioritizing and confirming projects through the MACC process with Low Carbon Technologies team colleagues, BUs are able to embed emissions reduction efforts within their budgets and long-range plans (LRPs). This nimble approach allows BUs the flexibility to adjust for regulatory and/or technology changes while receiving corporate support, guidance and oversight.
In 2022, ConocoPhillips funded over 90 MACC emissions reduction projects across our global operations at a cost of $112 million. These projects address improvements relating to venting and flaring, electrification, process optimization and efficiency, and include strategic pilots and studies.
Creating a culture of collaboration
Our collaborative efforts extend beyond ConocoPhillips. To better prepare key stakeholders, we led a large study aiming to better understand the long-term electricity load demand for the Permian Basin as well as upgrades that may be required for the basin to fully electrify. Through this project, we engaged with several key Permian operators, representing about 40% of Permian Basin production, to plan for infrastructure requirements. Another renewables project underway is a Bohai Bay offshore wind farm pilot in China, launched in partnership with CNOOC to supply power to the Penglai oilfield.
In July 2022, ConocoPhillips joined the Oil and Gas Methane Partnership (OGMP) 2.0 Initiative, a voluntary, public-private partnership between the United Nations Environment Programme, the European Commission, the Environmental Defense Fund and over 100 oil and gas companies. OGMP 2.0 has emerged as a global gold standard for methane emissions measurement and reporting and is aimed at minimizing methane emissions from global oil and gas operations. While developing BU implementation plans, the ConocoPhillips team participated in OGMP 2.0 working groups to further expand knowledge and share best practices within the industry. In line with the initiative’s guidance, we plan to incorporate source-level and site-level measurements when estimating methane emissions from our operations.
“Transitioning to a lower-carbon economy will require a lot of innovation and collaboration across different industries. At ConocoPhillips, the MACC process and our net-zero roadmap guide our work to achieve our net-zero ambition for operational emissions. When combined with the ingenuity and talents demonstrated by our team, we are confident in our ability to build a more sustainable business,” added Hutcherson.
A closer look: A strategy to reduce emissions in the Lower 48
Guided by the overarching, company-wide net-zero ambition, our Lower 48 BUs are implementing an emissions reduction strategy. For new developments, or greenfield projects, teams are targeting completion of low-emission design concepts by the end of 2023 with a focus on pneumatics, vapor control for tanks, flaring and electric compression. For brownfield (previously developed) assets, retrofit projects targeting these same emissions sources will be executed between 2023 and 2030.
Focus on flare reduction in the Bakken
In the Bakken field, our operations team focused on MACC projects to reduce routine flaring. This included an emphasis on treating sour gas, capturing otherwise flared gas, debottlenecking pipelines and facilities, and instrumenting with auto-curtailment when offtake is restricted. The execution of these projects resulted in a year-over-year reduction of associated gas flaring by more than 70%.
“Projects focused on treatment of sour produced gas had the largest impact on flare reduction,” explained Senior Environmental Engineer Jim Dobson. Typically, sour gas, which contains hydrogen sulfide, that does not meet pipeline sales specifications is flared or curtailed. As of year-end 2022, these projects enabled treatment and sales of 5 million cubic feet of gas per day, reducing flared gas volumes.
“Building on this success, the Bakken will continue to deliver MACC projects with a focus on flare reduction in other parts of the process,” Dobson added.
Dobson credits several factors for the notable decrease in flaring, including a culture shift that empowers the workforce to better identify and implement opportunities to eliminate or reduce the need to flare. The “GHG Guardians” initiative was a key driver in that culture shift. The program encouraged team members in the field to submit ideas or actions they had taken to reduce emissions and provided prizes to those who submitted viable emissions reduction ideas.
Additionally, the Bakken team is working with third party gathering and offtake providers as well as industry peers to develop effective flare reduction solutions, removing bottlenecks to the offtake of excess gas.
“We’re now one of the lowest flaring companies in the Bakken – not just talking the talk about reducing emissions but walking the walk. I’m proud to watch the team rally around these important environmental improvements,” said Juan Vargas, Strategic Sustainable Development Planning Engineer focused on the Bakken and Eagle Ford.
Efforts in the Eagle Ford and Permian
Though flaring is not as prevalent in the Eagle Ford and Permian fields as it is in the Bakken, many of the initiatives developed in the Bakken are being replicated, especially those related to changing worksite culture around the commitment to reduce all flaring. A 2022 meeting of asset managers and operational leaders established alignment on standards for routine and safety flaring.
“Employees have line of sight to the company’s net-zero ambition for operational emissions and are beginning to make decisions that align with emissions reduction goals,” said Ryan Nagele, Strategic Sustainable Development Planning Engineer focused on the Permian Basin. “We consider our emissions reduction strategy to be integral to regular business planning and operations — just like safety, cost of supply and production.”
We conducted pre-development work in 2021 and 2022 to evaluate the potential for wind and solar electric power generation for our operations and electrified many of our compression facilities in the Permian Basin to reduce Scope 1 and 2 emissions.
Pneumatic device replacements are among the highest priority emission reduction projects across the Lower 48, as they account for some of the more significant emission sources and have a competitive cost of abatement. With thousands of gas-driven pneumatic devices in service, the operations and engineering teams have begun to execute the first large-scale retrofit campaign in New Mexico and plan to continue to ramp up programs in other states through 2027. Each conversion increases revenue by keeping gas in the sales line while also allowing us to maintain regulatory compliance with new legislation or anticipated federal guidelines.